Storebrand Asset Management Q2 2024 business update

Business Highlights

• Net revenue of NOK 638 million, including NOK 63 million of net performance fees in Q2
• Net inflow of NOK 7 billion in Q2
• Strong AuM growth to NOK 1 298 billion

Storebrand Asset Management recognized net revenue of NOK 638 million for the second quarter of 2024, including net performance revenues.

Positive inflow and strong markets contributed to an increase in AuM, counteracted by strengthened NOK against other currencies. In total, AuM increased to an all-time high of 1 298 billion.

“A positive second quarter for us with increasing revenues, AuM, and inflows across the Nordics. The favourable market sentiment in Real Estate continued into the second quarter, particularly in Norway, where the transaction market was notably active with increased volume. Cubera X, our largest secondary buyout fund, is approaching hard cap and has already committed over 20 percent of its capital. I am also very happy to announce that we have increased our ownership in AIP to strengthen our offering in the infrastructure space”, says Jan Erik Saugestad CEO Storebrand Asset Management.

Increased ownership in infrastructure fund manager AIP
During the quarter Storebrand entered into an agreement to acquire an additional 50% of the shares in Danish infrastructure fund manager AIP Management P/S to reach a direct ownership of 60%. The increased ownership gives Storebrand control over a well-established infrastructure platform that is complementary to its existing alternatives offering that includes real estate, private equity, and private credit. At the same time, AIP will benefit from Storebrand’s strong market position, scale and investor relationships.

“Infrastructure assets offer clients stable returns, low correlation with other assets, making them good for diversification. They provide a long-term investment option and support carbon emission reduction by focusing on sustainable investments with good risk/return potential", comments Jan Erik Saugestad, CEO Storebrand Asset Management and adds;

“Infrastructure also represents one of the most exciting long-term investment opportunities, driven by structural shifts reshaping the global economy. Over the past 12 years, infrastructure funds have experienced strong growth, and the asset class is anticipated to continue its growth trajectory over the coming years.”

Encouraging outlook across the Nordics
Client sentiments were increasingly positive in Norway, where we had significant net inflows. We received positive inflows from institutional clients across the board, in the equity, fixed income, real estate and private equity asset classes. There are some indicators of a turnaround in the commercial real estate market, as we see growing interest and commitments to our Norwegian real estate fund Storebrand Eiendomsfond Norge KS (SEN KS). Our global momentum strategy, Delphi Global, has had positive net flows of more than NOK 1 billion so far in 2024.

In Sweden we were honoured to be once again ranked top in the Prospera Institutional Client survey in Sweden, where respondents noted their greatest current challenges included maintaining good risk-adjusted returns, liquidity in alternatives and rising administrative burdens. Further, we observe that our client success in Sweden and beyond is fuelled by being well-positioned to provide strategic guidance on ESG reporting and compliance with new regulations, which are ongoing and pertinent challenges for clients. Storebrand Fonder continued to grow in AUM and inflows during the second quarter holding a stable market share of 5,1 percent, representing a total AUM of 445 billion.

Positive signals continued to show in Finland, where in Q2 we passed the EUR 1 billion milestone in AuM from Finnish clients. Alongside the signing of a distribution agreement, we saw increased inflow into, and interest in, our Plus Funds strategies. In alternatives, we achieved a significant commitment to Cubera X.

Positive inflow from clients in Denmark in Q2 in conventional products, especially to our enhanced index strategies. In addition, strong development in alternatives, in particular our secondary private equity strategy

International demand for equities
We saw this year’s growth in international demand for equities, carry on into Q2 with Storebrand Asset Management Index Strategies awarded $600m of institutional mandates from clients in the UK and Iceland respectively. Activity levels remained high going into the summer, as clients rebalanced portfolios, increased foreign holdings and sought exposure within more sustainable solutions.

Interest also picked up for active strategies in Q2 and we see significant potential for the reawakened interest in active strategies. Our SKAGEN Focus strategy was recognised as Winner in “Best Equity Global Small & Mid Cap Fund Over Five Years” at the LSEG Lipper Fund Awards Germany 2024; and Winner in “Best Equity Global Small & Mid Cap Fund Over Five Years” at the LSEG Lipper Fund Awards Nordics 2024.

Positive sentiment in Real Estate
In the Real Estate sector, positive market sentiment continued into the second quarter, particularly in Norway, where the transaction market was notably active with increased volume. Storebrand Real Estate (SRE) participated in several transactions. We acquired Prof. Kohts vei 9 for approximately 1.7 billion NOK on behalf of a newly established Alternative Investment Fund under Storebrand Asset Management (SAM). Additionally, SRE represented Storebrand Life Insurance in the purchase of K8, a new high-rise office development in Stavanger.

We observed an inflow of capital into real estate during the second quarter, continuing the trend from the first quarter. In our Nordic real estate Core Plus strategy, we are actively investing and are involved in several promising processes that we expect to finalize in the upcoming quarter. These initiatives involve collaboration across our organization on a Nordic basis, aligning with our strategy to establish a comprehensive Nordic business platform that supports clients with real estate investments throughout the Nordic region.

Uptick in Private Equity
Our private equity boutique Cubera is experiencing an uptick in transaction markets. Still high activity within the secondary market, boosted by LPs using it to generate liquidity while awaiting distributions. Cubera X, our largest secondary buyout fund to date, is approaching hard cap and has already committed over 20 percent of its capital.

A busy AGM season is over and top rated on sustainability
The second quarter is the busiest time of the AGM season, when many large companies hold their annual shareholder meetings. Storebrand Asset Management (SAM) voted at 1,453 company meetings in Q2 and 1,728 meetings so far this year.

At the AGM of Amazon.com Inc., SAM co-filed a shareholder resolution requesting that the Board assess how the company respects international human rights law. "Large companies such as Amazon may face increased financial risk due to emerging EU regulation requiring mandatory human rights due diligence (Corporate Sustainability Due Diligence Directive), which also applies to non-EU large companies conducting business in Europe.

Time Magazine ranks Storebrand among top 10% of 500 most sustainable companies
Time Magazine and the data provider Statista have assessed the most sustainable companies of 2024, creating a top-500 list from over 5000 of the world’s largest companies. Storebrand Group is ranked number 41 among the 500, which is the highest of Norwegian companies assessed. Among the reasons for Storebrand’s high ranking are our ambitious climate targets, high scores by ratings such as the Dow Jones Sustainability Index and CDP, and because we have achieved good results in areas such as emission cuts and gender balance.

The next instalment of the Sustainable investment Review is due late August. To the previous quarterly updates>>